The stock market shines with thousands of investment and trading candidates. Stocks are securities and that means that they can’t go below zero. For the disciplined trader this is sort of a built-in money management. For the investor it may be the long way into oblivion. If you are on that way, start thinking about becoming a trader…

Contrary to stocks the Forex markets are based on contracts. Be cautious! What you pay into the account is the margin and not your ante. And then, Forex is often driven by random. Hard to believe if you look at charts, but nonetheless true.

Perhaps even worse is the futures market with its highly anticyclical behavior that at times converts itself to cyclical trending characteristics. This sort of market likes to shake out traders, because most of them are either to one or the other direction inclined.

Finally we have the options markets and they top everything. Unfortunately they are centered around the double-edged sword, the leverage. You could make a fortune if you were knowing the secret to turn the leverage to your advantage, but mostly you will just lose. There is not only the devaluation of the time value that makes options trading difficult. It is more — see the article above.

Interested in the secret to exploit the leverage? On one hand it is simple, but on the other…

So, you will have to learn about the right way or the nearly perfect way to trade the momentum and then apply that to underlyings with options. If you enter the right thing at the right time, you will overcome the math of the cruel options market.

]]>http://www.momotrade.com/x/stocks-vs-forex-vs-options-vs-futures/feed/0Investing vs tradinghttp://www.momotrade.com/x/investing-vs-trading/
http://www.momotrade.com/x/investing-vs-trading/#commentsMon, 21 Mar 2016 09:03:17 +0000http://www.momotrade.com/x/?p=503Investors are the ones that know it better, but traders don’t have to know anything. They just have to be fast. That may sound silly, but it is the truth.

The small investor literally has to know it better. In fact, they have to be the wiseacre. There are two reasons:

The market is always right. Wrong, our small investor has to be even more right, otherwise they won’t make a profit. A fundamentalist has to find stocks that are undervalued. The investor has to know it better than the market per se.

There are large fund managers, managing a thousand or a million times what the small guy has. Of course they have the better resources, the better data, and a staff working full-time. They are better connected and likely even better educated. Our small investor has to know it also better than the big guns…

Most likely the small investor is not any better than the market or the large players. The opposite seems to be more plausible. Yet, small investors don’t see this.

The trader instead accepts that he is a zero. Trading just needs the right trading system and nothing more.

Nothing?

Also not true. You will need discipline and the right trading psychology. That’s not easy, but it should be easier than to know everything better than all others.

Especially if you are an investor, you should do so. You will find the dirty secret of the stock market that has been hidden from you for so long and that is so hard to believe when you finally find out about it.

Really…

]]>http://www.momotrade.com/x/investing-vs-trading/feed/0Forex trading is excitinghttp://www.momotrade.com/x/forex-trading-is-exciting/
http://www.momotrade.com/x/forex-trading-is-exciting/#commentsThu, 15 Oct 2015 10:56:00 +0000http://www.momotrade.com/x/?p=51So exciting that many do it for fun and not for making money. If you want more than fun, you should have a system, though. Very quickly you will arrive at the conclusion that something in this “game” plays against you. Right, and this something is nothing less than the world’s biggest banks. This alone should tell every Forex addict that it will be much harder to only break even than it looks at the first glimpse.

Forex prices behave differently than stock prices. The typical stock day trader will have severe difficulties doing what he used to do in Forex. There is no index that magnetically pulls all stocks with it. And then there is not the big future potential that sets stocks apart from all other investment candidates. The outcome is, Forex is in the middle and long term purely driven by supply and demand.

Shouldn’t that be true for every market? One has to distinguish between real imbalances of supply and demand and short lived speculative ones. The difference to the stock market is that the anticyclical price behavior in Forex caps speculative directional price moves very quickly. In the stock market stocks can become disconnected from reality, so that prices are floating around possibly for years at “wrong” valuations.

This is so, because a stock’s reality is its hope and fear for future prospects, which are often hard to gauge. In Forex it is mostly companies doing business and their need for one or the other currency with some speculative noise on top of that for short and medium time spans. The long term forces of the market balance currency prices with interest levels, monetary policies and economic strength. In all cases there is not much room for exaggerations like those found in the stock market.

Speculative thrusts can emerge by random or even manipulation, but they are counteracted by money doing real business and seeking cheap market entries. Forex prices have a strong tendency to come back, at least for noisy short term moves. That opens the door for a scalping strategy. Of course there are also real shifts in price levels. The crux is to approach the market with a system that can distinguish both types of moves. Typical TA wizardry will not help much. Instead, the experience of seasoned Forex traders is needed.

These Forex methods are already there and extensively used. They just happen to be the other side’s “secret”, in the same manner stock market makers have their tricks. But someone who had been trading long index futures and then expanded to Forex is offering his scalping system and access to his trading room for RT mentoring:

Is it wise to imitate these sharks in the banks and will it work at all? Wise or not wise, you shouldn’t want to be on the other side.

]]>http://www.momotrade.com/x/forex-trading-is-exciting/feed/0Are ETFs the better stocks?http://www.momotrade.com/x/are-etfs-the-better-stocks/
http://www.momotrade.com/x/are-etfs-the-better-stocks/#commentsThu, 15 Oct 2015 10:53:44 +0000http://www.momotrade.com/x/?p=49No, but ETFs are technically stocks and that is their greatest beauty. If you know how to handle stocks, you are also fine with ETFs.

Due to the fact that under the hood they are funds, the risk of “bankruptcy” of a single ETF is minimal. There is the risk of financial failure somewhere down the road of the value guaranteeing structures, but that is smaller than the one for a company coming out with terrible earnings news over night.

There are special ETFs that are not only a bunch of different stocks but are synthetically linked to some sort of index. There is a virtual zero mark where the ETF should go into negative price territory, but because it is a stock, it obviously can’t go there. Thus these ETFs have the character of options , but without the value-crunching duration that makes trading pure options so hard.

There are some caveats with using stock methods for at least some ETFs. Basically they are the same as with stocks traded abroad. One has to take into account that gaps overnight occur more often, because the underlying market gets traded outside the trading hours of the exchange the ETF trades on. The Trend Rider system is usable for ETFs and stocks:

To some extent it is also useful for swing trading some commodities and financial futures, because these markets have also a natural overnight pause. For the same reason the system is less suited for Forex.

]]>http://www.momotrade.com/x/are-etfs-the-better-stocks/feed/0Many commodity and futures traders go brokehttp://www.momotrade.com/x/many-commodity-and-futures-traders-go-broke/
http://www.momotrade.com/x/many-commodity-and-futures-traders-go-broke/#commentsThu, 15 Oct 2015 10:52:18 +0000http://www.momotrade.com/x/?p=47This is a provoking start, but it has an avoidable reason. Most beginners in these markets, and some are lifelong beginners, don’t have a clue about money management. Derivative markets offer a high leverage often coupled with tight spreads. Essentially everything is in place to become rich. You just need to discipline yourself to the right bet size and then there is of course a system necessary.

Generally there are two kinds of trading, cyclical and anticyclical, and both have their merits. But, for day trading one sound strategy is to combine both.

Often there are very short lived oscillations surrounding a longer intraday movement with noise . Going against the very short term oscillation gives you a good entry price, but you are still on the right side for the longer move. Additionally, this method allows for making the spread, at least on entering the trade and while exiting if it goes right and stopping is not necessary.

This sounds good and it is useful in noisy future markets where every move gets exaggerated for minutes only to be reversed soon after. Especially stock indices have often the right “mix” of a noise-component, a high frequency oscillation, laid on top of a larger directional movement. It is also interesting for Forex, albeit the price driving mechanisms are somewhat different there.

So far, so good, but for now this is only easygoing theory. To make it real, more is necessary. Here is someone with a reasonable system, who is also offering to give you realtime advice and mentoring in a live trading room.

Seeing what other futures traders are doing and asking questions may exactly be the additional help that can make the difference.

]]>http://www.momotrade.com/x/many-commodity-and-futures-traders-go-broke/feed/0The necessary edge for scalping Forexhttp://www.momotrade.com/x/the-necessary-edge-for-scalping-forex/
http://www.momotrade.com/x/the-necessary-edge-for-scalping-forex/#commentsThu, 15 Oct 2015 10:49:46 +0000http://www.momotrade.com/x/?p=45Forex trading is not for the faint of heart. Why not let a robot do the thrilling work? Perhaps the simple answer is:

Because the robot will trash your money! Sadly this seems to be true more often than not. Many of the expert advisors out there for the Metatrader platform produce many smaller gains in a row, just to lose everything that got accumulated and more by one single blow.

May it be that the smoke on the homepage of the robot site below does not indicate a smoking hot trading system, but a meteoric impact of the last loss that left everything burnt?

Seen from a more optimistic viewpoint, this autotrading system seems to exploit something specific as it trades only the Asian session and only with a pure scalping system. Implicitly this means that currency market moving events statistically are more often originated from Europe and America than Asia. The Asian session seems to be viewed as a quiet interim period that more safely suggests a scalping trading style. Perhaps its also a good idea to find other periods of the day when to switch on your robotic scalper.

At least this is an interesting proposition. Whether it really works, is hard to say. The big banks should be able to do things like these EAs for the small guy on a higher level. One should expect their robots to wipe out all tradeable regularities to a degree that nothing is left for the bingo player.

]]>http://www.momotrade.com/x/the-necessary-edge-for-scalping-forex/feed/0What does a robot know about the stock market?http://www.momotrade.com/x/what-does-a-robot-know-about-the-stock-market/
http://www.momotrade.com/x/what-does-a-robot-know-about-the-stock-market/#commentsThu, 15 Oct 2015 10:46:59 +0000http://www.momotrade.com/x/?p=43This is the story of a fantastic stock signal program dubbed the stock robot, which is said to predict market moves of small stocks with stunning accuracy.

Stock market shaking giant Goldman and Sachs who lately got shaken by the market itself was the hotbed of this program. Originally it was used to run a hedge fond, raking in serious money with serious stocks.

For some reason this story ended in a divorce and the inventor of this money monster found himself unemployed with the bored mind of a trading genius seeking a drain for its creative impulse. In order to find some gratification for his heroic efforts there is now a public version of the phenomenal signal system for smaller stocks available.

At this point we take a little breather and move our viewing position perpendicular to enable a more distant analyse of this penny stock wonder, whose story could have been or is in reality completely different. What if these guys do a pump and dump scheme?

The interesting answer is that this would not necessarily mean to not touch this service. Prices of the recommended stocks go still up. They just may come down as fast as they went up. Under the assumption that you are faster in and out than so many others who believe more in the stock tip, this may be the perfect environment for swing trading.

Clearly the initiators have the best advantage, but perhaps there is still enough room for others to participate. And perhaps their system sometimes detects a signal that is for real, or they just happen to be the first users and pushers of otherwise legit stock trading ideas. That is why the prices of these picks don’t always come down eventually.

]]>http://www.momotrade.com/x/what-does-a-robot-know-about-the-stock-market/feed/0Option trading as a businesshttp://www.momotrade.com/x/option-trading-as-a-business/
http://www.momotrade.com/x/option-trading-as-a-business/#commentsThu, 15 Oct 2015 10:44:07 +0000http://www.momotrade.com/x/?p=41Most option traders are like gamblers in Las Vegas. Full of hope and with an empty wallet after the action. But there is an alternative. What if you were treating your options trading as a business rather than a gamble?

Trading options does not necessarily mean to buy out of the money options, and dream of millions, only to see their value vanishing in most cases. Instead, one can use them for hedging. But the best way to play options is to buy options at the money and ride the momentum, if there is some. Beats all option combinations…

There are combinations of stocks with options or with options alone. These things are difficult and complex, even not completely understood yet, and some of these combos are more interesting than others.

But the secret key is something else, namely techniques to get a favorable price when setting up the position. After the initial entry there are situations when the whole position can be adjusted according to market movements. Only the conjunction of these two things will make you money. Of course, there is more knowledge required for running an options business than for treating options as lottery tickets.

There are two guys offering comprehensive material about the options market and its hidden possibilities. They claim that they know how to get the cheap market entry and how to strengthen a position with the right adjustments. The result is a trading style that works independent of the market direction:

If you don’t want to play roulette while still enjoying the high leverage of options, doing a more thorough calculation may be the way to go.

]]>http://www.momotrade.com/x/option-trading-as-a-business/feed/0The system of Nicolas Darvas and its secrethttp://www.momotrade.com/x/the-system-of-nicolas-darvas-and-its-secret/
http://www.momotrade.com/x/the-system-of-nicolas-darvas-and-its-secret/#commentsThu, 15 Oct 2015 10:40:22 +0000http://www.momotrade.com/x/?p=39Stocks are the fastest way to become rich – or poor. The favorite method of becoming the former is to bet on growth stocks that are making a new high.

A long time ago Nicolas Darvas wrote a fine book about this strategy with the pleasant title “How I made two million dollars in the stock market”.

Nowadays markets are a bit harder to trade. The other side is not only a market maker who relies on making the spread, but high-frequency trading robots that try to steal cent after cent from you. They react faster and better to the market than you can, topping your limit or hitting the other side in the right moment and causing more slippage for you. There are position trading systems that are able to calculate the probability of recurring patterns, which they then seek to exploit, leaving trend traders with heftier price oscillations and a bigger entry risk.

Here and now you are introduced to newly found secrets regarding the “Darvas method”. At least that is what the site below is claiming. With or without new secrets, the essential stock market wisdom from the fifties of the last century is still valid. The system of Nicolas Darvas is the direct adaption to the very nature of the stock market. Why?

Stocks are bets on growth potential and they are offered as such on their birthday. They are like options without a fixed expiration. Some of them fulfill their promise and advance, making more new highs than all others. Thus an advancing price at the high is the best indicator for more growth and price advance.

A system trying to enter such positions is best aligned to this indicator and to the whole idea of the stock market. That is the real secret of this system and it makes it the best possible system. Of course, so and so many day traders think otherwise, not to mention value investors.

]]>http://www.momotrade.com/x/the-system-of-nicolas-darvas-and-its-secret/feed/0Swing trading the trendhttp://www.momotrade.com/x/swing-trading-the-trend/
http://www.momotrade.com/x/swing-trading-the-trend/#commentsThu, 15 Oct 2015 10:38:20 +0000http://www.momotrade.com/x/?p=37The stock trader has nearly a perfect trading world. Thousands of stocks to choose from, the safety that an account can’t go below zero, provided that you don’t use margin, and warrants and ETFs also available. Every time frame from daytrading to investing makes sense, and behind a stock is a company with a story to tell.

Stocks themselves are essentially like options without a limiting duration. Every stock has the potential to multiply its value by a large factor, but conversely it can’t go below zero. It is this asymmetry that should be eyed by everyone.

In reality so many are fixated on either slow moving mature stocks or otherwise disappointing ones. Why?

Naturally stock traders should be fascinated at most by the steepest trends and try to enter them by all means. It looks logical, but it is also said much easier than accomplished. What typically happens is this: In the moment you finally managed to get on the trend without being stopped out immediately, the trend magically slows down, begins to flutter or reverses so that again almost nothing was gained.

This is of course a simplification and it regularly happens differently. But all too often major trends get missed completely.

The answer may be to use swing trading methods specifically adapted to running trends and to preselect and concentrate on stocks with current and inflammable potential that already have begun to show price strength.

Arguably swing trading in the trend yields better results, even if the primary goal is not to ride trends themselves. At least that is what I think about this system, which is usable for both, swing trading and trend investing.

You are a day trader? Try it nonetheless. Intraday movements are also better shaped and larger for stocks with long term potential. And who knows, perhaps you switch back to swing trading one day.

]]>http://www.momotrade.com/x/swing-trading-the-trend/feed/0Is it better to trade big or small?http://www.momotrade.com/x/is-it-better-to-trade-big-or-small/
http://www.momotrade.com/x/is-it-better-to-trade-big-or-small/#commentsThu, 15 Oct 2015 10:35:57 +0000http://www.momotrade.com/x/?p=35…stocks, of course. On the surface quite some things point away from the small stock markets. The better a company is capitalized, the more information about it is generally available. Chances that this company is still in business somewhere in the future are also better. Both makes small stocks very volatile. So why just not concentrate on the bigger ones?

Smaller stocks have a secret – but a well known one. It just gets forgotten all too often. They can rise substantially in a very short time. A stock that doubles or even explodes 10-fold is no surprise in these markets. Of course a move into the wrong direction is evenly possible.

The nice thing here is that they can not go below zero, which limits the maximal loss to 100% but they may produce a gain of say 1000%. It is this fine asymmetry that makes the right candidates so interesting.

There is just a little problem… and that is the meager amount of available information. Worth a try may be this site that offers five different methods of selecting the right stocks together with alerts. Often the signals will disappoint, but the asymmetric price movements are on your side.

The above is an interesting chance to develop your penny stock bingo game into a more serious business. It requires no real work on your side, because you get signals. However, there is one thing to check, namely whether these picks indeed resemble the entry situations that the service is looking for. Otherwise this may be more a pump and dump scheme (the owner of the site claims it is not).

]]>http://www.momotrade.com/x/is-it-better-to-trade-big-or-small/feed/0Stocks are the best market for trading signalshttp://www.momotrade.com/x/stocks-are-the-best-market-for-trading-signals/
http://www.momotrade.com/x/stocks-are-the-best-market-for-trading-signals/#commentsThu, 15 Oct 2015 10:33:26 +0000http://www.momotrade.com/x/?p=33The best trading vehicles are stocks, at least for trend trading. While Forex and futures offer high margin trades, stocks have the ability to produce large gains intrinsically built in. These possibly large gains come without an equally large risk. The stock trading account can’t go below zero, provided you don’t use margin. The greater the volatility of a stock, the larger is this risk to reward asymmetry. There is only one conclusion possible. The stock picker should love stocks with the steepest trends, the wildest swings and the deepest cliff dives.

Another reason to favor stocks over Forex is the huge pool to go fishing for them. Thousands of stocks and only a handful of currencies. That is why nobody has ever heard the term “currency picker”. The third argument for stocks is the company behind it with some fundamental value, a future potential and a reasonable chance for the small investor to decipher the meaning of both for the stock price.

Trading systems based on technical predictions like trend following can be enriched with fundamental projections. This is not impossible in commodity or currency markets, but because of the vast number of stocks there are always many more investing candidates in the stock market with a clearer picture of the future. Still, there seems to be catch. It looks like a lot of work and knowledge is involved to become and then be a stock master, but here is how it could be done the easy way:

The site above offers a unique program that combines automated stock picks with the ability to research fundamentals and technicals yourself. They claim to have a monster record of trading performance and invite everyone to check out the demo version for free.

]]>http://www.momotrade.com/x/stocks-are-the-best-market-for-trading-signals/feed/0Trading software for the stock markethttp://www.momotrade.com/x/trading-software-for-the-stock-market/
http://www.momotrade.com/x/trading-software-for-the-stock-market/#commentsThu, 15 Oct 2015 10:31:11 +0000http://www.momotrade.com/x/?p=31Generally Forex is the market seen as the right vehicle for automated trading today. The reason is the high liquidity and a trading session that spans over almost a week. That is the right hotbed for trading software platforms like MetaTrader and the reason for its existence. There are advantages for autotraders to choose Forex, but there are also reasons to look at the stock market.

Essentially there is one main difference between Forex robots and stock market autotrading. What in Forex is more jumping on trading signals is in the stock market a selection of the right stocks. It is of course possible to swing trade stocks like a futures trader by switching a long position into a short one and that forth and back. But the strength of the stock market is clearly the vast number of stocks. You should take advantage of that!

The easiest way to do so is to have a stock market scanner, a program connected to a realtime database that enables you to either maintain a current group of trading candidates, or to find directly entry signals.

The stock trading is not fully automated with such a system like the above. You still have to manually execute the trading signals or act on your trading group. This has the disadvantage of more work. On the other hand, it gives you more control over the process. The sad truth about Forex robots is that you wake up one morning and the robot has destroyed your trading capital over night. Happy breakfast!

]]>http://www.momotrade.com/x/trading-software-for-the-stock-market/feed/0Penny stock picks for lazy tradershttp://www.momotrade.com/x/penny-stock-picks-for-lazy-traders/
http://www.momotrade.com/x/penny-stock-picks-for-lazy-traders/#commentsThu, 15 Oct 2015 10:28:43 +0000http://www.momotrade.com/x/?p=29Trading signals for penny stocks are best generated on a daily basis. There should be no need to jump within minutes into a buying signal in a market that is often illiquid. Penny stocks offer the combination of lazy trading and adventurous or even breathtaking price moves. The strength of this type of speculation is exactly this – gains that are many times greater than the maximal loss.

Not so fine with the micro cap markets is the inevitable and ongoing cheating. The typical scam is the pump and dump scheme. Take some unknown company and tout it like hell, often by suggesting a strongly exaggerated potential or with the anticipation of completely imagined events of the future.

There is lots of criminal activity in these markets. So, why bother with this type of energy drain? The answer lies in the charts… Just look at them, and you will find that prices still do what they ought to do in a stock market. They go up and down – just faster than with mature stocks.

But there is another drawback. Only scarce information is available about potential penny picks. Some professional help is needed, but … most of these helpers do nothing but the pump’n dump con. You would need someone whom you can trust and perhaps a system for specifically trading penny stocks. Not so much with his ability to foresee the future. That will be severely limited in most cases anyway;) No, the first problem is to find someone with the honesty to issue real picks and not only pigs.

The penny stock picker above has a horrible site. Don’t be rebuffed by that. He isn’t a prophet either. Again, that shouldn’t hold you off. He is just putting work in the detection of favorable situations. Combine that with the favorable math of huge gains and limited losses and you could advance to the sunny side of speculation.

]]>http://www.momotrade.com/x/penny-stock-picks-for-lazy-traders/feed/0Trading signals for futureshttp://www.momotrade.com/x/trading-signals-for-futures/
http://www.momotrade.com/x/trading-signals-for-futures/#commentsThu, 15 Oct 2015 10:25:35 +0000http://www.momotrade.com/x/?p=27Trading futures is like riding the bull. Just wanting to do it is not enough. Futures markets have the highest failure rate among novice traders. On the other hand, they are tantalizing traders with the ability to trade with unparalleled margin. If you were able to read the market pulse, this could be your personal semiautomatic money machine. Sadly, it is not that easy…

But there is more to it. For instance, trading the EMini could be transformed into tracking the EMini and using the derived trading signals for stock entries. This system doesn’t stop with serving stock day traders. One could use it for finding safe entries into longer term plays in the stock market. Watch out for a possible stock investment with growth potential and enter the market when the whole index gives another intraday buying signal. Your favorite long-term stock will likely go up with the flood. This stock trading system would allow for ultratight stop losses.

Basically any trading has to combine a relatively cheap entry price with momentum in the right direction. It is this combination that gives the start advantage, which is necessary for using the stop loss method. If you are able to use stops without being killed by the many small losses, you are able to trade the trend. If you are stopped out, it isn’t a trend anymore. If not, you are on a trend. Using stops puts you almost automatically on a trend.

This is the core secret of trend trading! You just have to keep the small losses in check. Here we have a futures trader who specializes in using the small pullbacks in a longer running intraday trend to create cheap entries in ongoing trends. This trading system is especially for the EMini, but it works also well for other markets.

The extra benefit offered here additionally to the system itself is a trading room where you can watch a successful day trader over his shoulders. Perhaps this is even more worth than the system itself.

]]>http://www.momotrade.com/x/trading-signals-for-futures/feed/0Forex robot or trading room?http://www.momotrade.com/x/forex-robot-or-trading-room/
http://www.momotrade.com/x/forex-robot-or-trading-room/#commentsThu, 15 Oct 2015 10:22:46 +0000http://www.momotrade.com/x/?p=25Markets are getting more and more automated and that is also true for Forex. For the small trader Forex is the El Dorado of algorithmic trading. The reason is of course the ever growing number of available Forex robots. And the reason for that is of course MetaTrader, this ubiquitous platform for outlining a trading algorithm and directly connecting it to a Forex broker. The reason for the ever growing number of Forex brokers in turn, is … you – the easy to milk cash cow.

Looking at the Forex phenomenon this way, it should be instantly clear that almost all Forex algos out there won’t work. There is another way to come to this heretic conclusion. The big players like banks in this market pay high salaries to their trading system development staff hoping that they will find some automatable advantage to exploit the market. With their size, capital, and other trading resources they are then able to leverage even a tiny trading edge and rake in millions, or more. The question here to ask for small Forex traders is of course, why should my little robot beat the big ones?

The answer to the Forex question is in our opinion that scalping is difficult and trend trading is easier, but successful trend trading is still hard to achieve for fully automated systems. At least in Forex… At this point the human trader, who is able to associate price behavior with news and the economic situation, has the real edge. At least he could have it. Also important is simply the dark mine field of trading psychology. Guess what a robot understands of psychology.

There is just a little problem. Not every human trader will make it in Forex. Or, to be a little less polite, you specifically won’t make it. This is of course a statistical assumption. If you think it is wrong, all right, skip this recommendation. But if you suspect there could be the tiniest grain of truth in it, do yourself a favor and visit the

There is someone with a remarkable system, albeit easy to execute on a first glance, but nonetheless effective. Still, trading in reality is much harder than in theory and that is why he is additionally offering access to his trading room with live alerts and insights.

]]>http://www.momotrade.com/x/forex-robot-or-trading-room/feed/0ETF trading signalshttp://www.momotrade.com/x/etf-trading-signals/
http://www.momotrade.com/x/etf-trading-signals/#commentsThu, 15 Oct 2015 10:18:18 +0000http://www.momotrade.com/x/?p=23ETFs are the dream of the modern investor. Technically they are stocks and as such conveniently tradeable. The big plus compared with stocks is their fund nature. Substantial losses are less likely than with stocks. Diversification is done by the fund itself. You can safely pick just two or a few ETFs and allocate your whole trading capital into them. Of course, that can be also done with stocks, but that’s not everybody’s cup of tea.

Another fine thing is the extension of the stock universe. There are commodity ETFs that are decoupled from the overall stock market movements. Special Short-ETFs even move inversely to their long counterparts. Overall this means for the stock investor that ETFs offer trading opportunities even during a bear market without the need to short individual stocks.

Swing trading in the current trend, switching from a stock company to a commodity, then to a foreign stock index and finally back to another stock – that is the method that theoretically brings in the biggest profits. Combine that with a thorough signal service and you may have the golden goose that lays silver eggs for you. Perhaps it is even the other way round.

Why not try to find potential entry situations yourself? Perhaps because the trading signal source above outrivals your own trading abilities! There is also the chance to learn something from a pro. In case you are yourself a seasoned swing trader the answer could still be, because you like to have it convenient. At least you may get one or the other trading idea earlier than you would have found it yourself. This alone could be the killer reason to rely additionally on an external trading signal source.

]]>http://www.momotrade.com/x/etf-trading-signals/feed/0The Simple Trend Trading Systemhttp://www.momotrade.com/x/the-simple-trend-trading-system/
http://www.momotrade.com/x/the-simple-trend-trading-system/#commentsSun, 11 Oct 2015 11:09:13 +0000http://www.momotrade.com/x/?p=4Modern investors are actively invest-trading the markets. Buy low and hold forever was yesterday. You will need only one thing for being the silver surfer riding the monster wave and that is a meaningful trend.

The trend is your friend and trend trading can be the most profitable form of trading. Momo Trade is trend trading, swing trading, and investing together. It is all about jauntily entering the next megatrend.

At the end of this article we are going to reveal how to do this. Okay, here is the shortcut:

How to enter the right trend? Do the Momo Trade!

Momo Trade? There are reasons for it. One of it is to make people curious, but there is more to it…

(:

If you haven’t become curious enough by now to find out about the system that follows the Zen trail, let’s start with some abstract thoughts about trading and a primary question:

When to get in?

Is it right to buy into falling prices or better to wait for them to stabilize?

Could it be necessary to wait a little longer and buy only the first move up after a fall?

Should one chase rising prices or even wait for a base after a rise?

Does waiting still a bit longer for a restart of the trend after a pause give the needed additional boost?

Or perhaps ignoring price action and concentrating on fundamentals is the best thing to do?

The answer is: It depends, but not on the situation. Instead, it depends on the trading system you use, which should be clearly aligned to one or the other style. In other words, one can make money in the markets with cyclical and anticyclical systems. Just don’t try to mix one method with the other.

Trend trading means going with the flow

Almost by definition procyclical behavior is mandatory for trend traders. The best trend traders enter a trend at the current high, for short-term entry situations and also for longer terms. This has two advantages:

The probabilities at the start are skewed to the trader’s favor. The high indicates a running trend, there is pressure that drives the price further and makes an entry easier.

There is a trend at all, which means prices are moving in the right direction, perhaps for a longer time. The cyclical method is the faster way to become rich. Anticyclical traders are more investors. They generally need a long life.

The longer trend and fundamentals do matter for a sound system. Stocks could be traded solely on a day trading basis, but that means giving up most of the possible gain. The real money is made by holding when things go well and riding a trend for many month that at its best finally overshoots by a wide margin.

That is why fundamentals are important. Like prices, which run away once they have gained momentum, revenues and earnings of companies that rise do this often with a remarkable constancy. We have a growth stock. It pays off to take rising revenues into account. Over all concentration on such stocks will yield better results even if the targeted time horizon of holding periods is much shorter.

Advantages of stocks

One of the beauties of stocks is that they are essentially options but without the expiration date. At least this is true for stocks on the move. It is possible that they multiply their value by a large factor, and yet, they can’t go below zero. This alone is highly interesting, because it offers the possibility of a random trading system, just driven by stronger moves upwards than downwards. Of course this effect only becomes noticeable if you hold a stock for a longer time. Day traders go away empty handed.

Another fine thing about stocks is that there are stock markets, by which I mean that there are thousands of possible trading candidates. Compare that to Forex or futures. Together with ETFs, some of them being short-instruments and others matching foreign markets or commodities, there is always something to pick. Without the need to go short you can still enjoy the option-characteristic of stocks.

Why a system and why rules?

Strict rules condensed into a trading system are important because there is psychology involved. Experience tells that a system that concentrates either on cyclical or anticyclical methods and doesn’t try to mix them, is far more easy to apply. A system whose elements are uniformly supporting either one or the other style is enormously helpful. There are more than enough reasons to get confused by the markets alone. Psychology is the deep problem of a trader. He needs a trading system as a foothold for combating uncertainty.

The most basic rule for the concrete trading is the stop-loss. This is the ingredient that makes cyclical trading what it is, meaning it is far more than just keeping losses in check. If you enter a position and don’t get stopped out, you are on a trend. If you get stopped out, the trend has come to an end. This is of course a simplified and probabilistic view, but it shows how a rule of a trading system steers the trader into the right direction.

For anticyclical investing a stop-loss is devastating, because it is contradicting the idea of buying as cheap as possible. This is a fine example where in trading the right element can be in the wrong system.

What is a trading system and what is it not?

A trading system must be self-consistent. All parts of the system must fit together. Something that doesn’t fit, while it may be the right thing for another system, is like a grain of sand in the machine, the money machine that is. So, is there a money machine? Yes, but…

This machine can’t serve everyone. As common sense tells, there will only be few who can exploit a specific system. A system that is trading the high and overshooting prices has fortunately a relative large capacity and is able to support quite some people’s desire for success.

Trading at the high means also something else. The simple trend system only buys stocks long and doesn’t go short. Together with the rules to allocate the trading capital to the right number of stocks and not to use margin, at least not overnight, it more or less assures that you can’t go broke. Money management is the part of a trading system that should be nothing but a pure machine.

Of course, even the best system and the best money management can’t guarantee that a trader will not incur losses, contrary to what so many want to believe or want to make others believe.

The market and its system

Astonishingly, chances that prices go in the right direction relative to the wrong one are almost always about 50:50. The best bet for the price some time ahead is usually the current price. This is the universal law of the market and, whereas I hesitate to add this here, it is almost independent of any feelings and ideas you might have about a bias of the future price direction!

The reason is the market itself. In most situations prices are near an equilibrium. Not only that demand matches supply, but also chances for up- and downwards moves approach each other. The market mutates its state constantly so that it is hard to figure out. It has to be this way.

But then, how to trade? You probably guessed it by now. Chances can diverge when the price is on the move. That is why momentum traders operate at the high.

Philosophy of Momo trading

The basic principle of our simple trading system is to get on board of an ongoing, starting or restarting movement with a tight stop in a situation where price pressure gives statistically more often than not a good start. The preselection of stocks at a longer term high with rising fundamentals will then do, again statistically of course, its magic and produce some bigger gains over time.

In short, the simple trend trading system enters at the day high or near the high of a short term move and that in a longer term trend possibly with fundamentals also on the rise. This is the ideal, but in reality it is more complicated than identifying a buy signal every time the price is near a high in all time frames.

Prices can get ahead of themselves and become vulnerable to swinging back. What we need are forces that are not exhausted. Oscillations are a necessary occurrence in all time frames, otherwise the market would be too easy, everyone could figure it out and everyone should win, which is impossible.

Then there is the “magnetic” effect of the whole market. Relative strength can indicate price pressure even with prices going down. The ideal of trading at the high has to be adjusted to cope with these oscillations, random influences and index induced forces.

What about swing trading? Perhaps it could not easily be seen as cyclical, because the swing trader typically waits for a price retreat and then for the first turn of the tide. A trend trader should also be able to trade swings being in a longer trend. This way the regularity of swings are converted in entry safety and exploit still the power of the trend, which is a basic method for managing oscillations. You are a swing trader and you knew this already or find it simplistic? Well, look at your trading history and see if you applied your knowledge!

Fine theory and ugly reality

In reality things differ from the ideal and so a trading system needs some robust rules for dealing with the real world. The classic problem is an ongoing trend and a trader waiting for a dip. When it finally comes, the trader gets in but the price doesn’t want to swing back and the trend has topped out.

One of the key elements of trend trading is to get on the trend as fast and riskless as possible. Ideally the trend is smooth, the swings are clear, the start is crisp. That would be the easy case, but reality looks mostly different.

Does searching for specific price patterns in longer ranges result in high-probability trades? Or do we have to identify specific fundamental situations for nearly riskless entries? The answer is no. There is absolutely no reason why the former should work, and while there may be clear situations of the latter type, they are too seldom.

Chart wizards and fundamental number crunchers, I hear you grunting now. It may be hard to believe for you, but it doesn’t work this way. There is no way to identify infallible signals or secret patterns beforehand. Using a trading system is bending statistics to your favor and not hoping for investing wizardry.

So, what is it then?

Two profit driving forces

The most powerful chart pattern is the trend, because it means something real. There is a valuation shift underway and that is fueled for instance by the specific product of a company. When is comes to forecasting quality, the trend dwarfs all other chart formations and also comprises all too complex fundamental number exercises. Be able to judge the trend and the product situation and you will see the big picture.

Trading means overcompensating losses with gains. On the micro-level this is done by having short-term setups with matching stops that make sense.

The longer trend, the right product, and an entry situation with current pricing pressure. Seems to makes sense, but how to do it in practice?

The daily bar chart

The simple trend system uses the daily bar chart, because it has a medium time frame usable for short-term trading and holding a position for a longer time. The other basic advantage is that daily bars are the most natural time frame, mirroring our activity during the day and the pause of the night. If you look at the market through the glasses of the daily bar chart, you will find more regularities than with any other time frame.

The daily bar chart is the foundation for the entry patterns of the simple trend trading system. Entry setups allow for statistical advantages exploiting more coherent movements that arise for short times from a generally chaotic market behavior. Even the atypical usage of daily bar setups for day trading is possible.

It is this advantage at the start of a trade that is psychologically necessary for applying the stop-loss rule. Both combined with the preselection of stocks with a longer term strength lets traders operate near the possible optimum.

How exactly look these setups? Actually there are various pairs of entry and stop-loss that work. For the stock market, as a rule of thumb, the price could be in more than one time frame at a high. Especially it could be at the high of the day when entering. Forex may work with waiting for a dip of about 100 pips to enter the longer trend.

Various setups work. The secret is that the setups are not the secret of a good system. It is the matching of the main parts.

All five items could be described much more detailed and some others are missing at all. Most notably you need to gauge when the long-term trend has come to an end so that re-entering attempts have to be stopped. In other words, when is a trend meaningful? You also need at least some basic money management.

This wants to be just a skeleton description for a working system. It is more important that the core makes sense for a competitive trading system. Details can be different then.

You expected more? A method that is highly concrete, easy to use by everyone, and success is guaranteed also for everyone? Perhaps detailed secret formulas or precise graphical methods? Something that looks like the surefire system that we have seen a million times drawn into charts?

There is no such thing. It simply can’t exist. Everyone would have to be a winner. The markets have to be difficult.

Trading is an art…

]]>http://www.momotrade.com/x/the-simple-trend-trading-system/feed/0The next monster trend for making real moneyhttp://www.momotrade.com/x/the-next-monster-trend-for-making-real-money/
http://www.momotrade.com/x/the-next-monster-trend-for-making-real-money/#commentsWed, 12 Nov 2014 14:03:56 +0000http://www.momotrade.com/x/?p=492Trend trading is working best with the right trend. Sounds silly? Maybe, but look at your last trades and think again…

We are letting our money work for us by trading the long-term trends in the financial markets. The ambitious investor tries to get on a trend by means of trading and then holds onto it. Alternatively he only trades in and out of it. We need the right trend and the right trading system. The right trend is the significant one…

We also found many interesting trading systems over there, but the most convincing is the one that seems to have given this specialized site its name: Momo Trade.

Essentially Momo Trade is about one simple thing, namely finding a promising entry situation with huge potential. It uses the simple trend trading system as the most convenient method to trade relaxed. But there are also other trading systems that allow trading in the zone.

]]>http://www.momotrade.com/x/the-next-monster-trend-for-making-real-money/feed/0The right mindset to overcome debthttp://www.momotrade.com/x/the-right-mindset-to-overcome-debt/
http://www.momotrade.com/x/the-right-mindset-to-overcome-debt/#commentsWed, 12 Nov 2014 14:00:17 +0000http://www.momotrade.com/x/?p=490At first comes mental preparation. Find out whether your financial misery is more due to excessive spending or difficulties to earn money. If you are in debt, analyze the reasons. Then take a deeper look at the debt itself. Get a clear picture of the size and structure of it. Find out your credit score and check your credit report. Could part of your debt be refinanced? Look at it in terms of cost. How much interest do you have to pay for it? In short, you have to become conscious about your situation and how it hurts you. That is the starting point for developing the right mindset to mitigate your main psychological problem. It is either the spending or the earning…

Here we go with some strategies to get rid of debt and repair your credit score:

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